By Peter Bergman (MoneyAmped.com)
The announcement that the electric car manufacturer did not meet its delivery projections for the first quarter has caused the price of Tesla shares to decline.
Tesla sold nearly 387,000 vehicles during the first quarter of the year, a 20% decrease compared to the previous quarter and an 8.5% decrease compared to the same period in the previous year. Since the beginning of the COVID-19 pandemic in early 2020, this marked the first time that the company’s sales had decreased in comparison to the previous year.
The final tally is lower than what Wall Street had predicted, which was 457,000 separate deliveries. The information presented here is derived from the average forecasts of eleven analysts that FactSet provided.
In a recent note, Wedbush analyst Dan Ives stated that the company’s financial results were deemed a complete failure that is difficult to justify. This was noted in spite of the fact that the company had predicted that the first quarter would be without much excitement.
Ives stated, “We consider this to be a significant turning point in the Tesla narrative.” He went on to say that “there may be challenging times ahead that could potentially disrupt the long-term Tesla story.”
The closing price of Tesla shares on Tuesday was $166.63, reflecting a decrease of 4.9%.
What are the delivery numbers?
As per a press statement released on Tuesday:
- In the first quarter, Tesla manufactured a total of 433,371 vehicles, including 412,376 Model 3 and Model Y vehicles and 20,995 vehicles from other models.
- In the first quarter, Tesla achieved an impressive milestone by delivering a combined total of 386,810 vehicles. This included an impressive 369,783 Model 3 and Model Y vehicles, along with 17,027 deliveries of other models. The company’s commitment to providing a diverse range of high-quality vehicles is evident in these remarkable figures.
What is the reason behind the decline in Tesla deliveries?
A number of factors contributed to the decrease in sales, including factory closures brought on by a conflict in the Red Sea and an unfortunate arson incident that occurred at a facility in Berlin. Additionally, the initial stages of an increase in production for the upgraded Model 3 were a contributing factor.
Additionally, the perception of the consumer may have an effect. The pool of potential Tesla buyers in the United States is decreasing, according to a recent survey carried out by the market intelligence firm Calibre. This is partially due to the controversial image that CEO Elon Musk has been portraying.
Because of the numerous posts that he has made on the platform, the billionaire, who is currently engaged on X, the social media company that he purchased in 2022 for $44 billion, has been subjected to criticism. Musk was subjected to criticism from the White House in November for sharing a post that contained antisemitic content. Tesla CEO Elon Musk has responded to allegations that he harbors prejudices against the Jewish community.
A challenge is presented by the decrease in consumer demand for electric vehicles, which is occurring concurrently with an increase in competition.
In the first quarter, Tesla regained its position as the leading seller of electric vehicles worldwide, surpassing the Chinese automaker BYD Co., which also experienced a decline in sales during the same period. This was accomplished despite the fact that Tesla needed to meet the expectations that were set for it.
